Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Borrowing for tax cuts reckless in light of report

Borrowing for tax cuts reckless in light of OECD report

The Green Party is challenging the Government to justify a new round of income tax cuts in light of a new OECD report, which shows that New Zealand has low tax rates compared to the rest of the OECD.

“This Government is proposing to cut taxes for upper income earners with the result that, all other things being equal, we will run a larger budget deficit and borrow more. Yet we already have some of the lowest income taxes in the OECD. Only Mexico has a smaller ‘tax wedge’ than New Zealand,” said Green Party Co-leader, Dr Russel Norman.

The OECD report, Taxing Wages (2009), was released today. The OECD report does not just look at headline tax rates but rather compares labour costs to the employer with take-home pay for workers. It is standard throughout the OECD for employers and employees to make contributions to social security and superannuation in addition to income tax. These contributions need to be taken into account when looking at the total tax picture, hence their ‘tax wedge’ analysis.

“New Zealand’s position at the bottom of the tax wedge table is because we don’t have compulsory superannuation and social security payments like a large majority of OECD countries. The Government misleads people when it compares our headline tax rates with other countries without taking this into account,” said Dr Norman.

“With the second lowest tax wedge in the OECD, it is hard to justify borrowing to pay for tax cuts at the top. Without the imminent tax cuts, we would be able to move into surplus faster, be able to start paying off our growing debt sooner, and continue to deliver high levels of Government services.

“It is reckless for National to give tax cuts at the top end when we are running a budget deficit and building up government debt. This OECD comparison shows just how unnecessary this is.

“National claim to be fiscally conservative but in truth they are fiscally reckless,” said Dr Norman.

Link to OECD report, Taxing Wages:,3343,en_2649_34533_44993478_1_1_1_1,00.html


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Vulnerable Kids, RNZ Funding, And Poppy

The decision to remove the word ‘vulnerable’ from the Ministry for Vulnerable Children could well mark a whole shift in approach to the care of children in need.

And I’m hedging with the ‘could well’ only because the Ardern government hasn’t yet spelled out whether the name change it has announced will also involve a rejection of the controversial use of Big Data to try and predict those children deemed to be at highest risk of inter-generational reliance on welfare support. More>>


Principals' Federation: End Of National Standards

Today the Minister of Education announced that the Government has stopped the controversial National Standards system of assessment and declared them an arbitrary measure which did not raise children's achievement as the previous Government intended. More>>


Public Good: People’s Report On Public Broadcasting And Media Presented

The People’s Commission on Public Broadcasting and Media, was crowdfunded and was informed by an extensive consultation, seeking the views of both those working in Media as well as gathering input both online and in person from ordinary Citizens. More>>


RBNZ To RNZB: PM's Press Conference

Prime Minister Jacinda Adern was joined by Minister of Finance Grant Robertson and Minister for Children Tracey Martin to announce the appointment of Adrian Orr as the new Governor of the Reserve Bank and the name change of the Ministry for Vulnerable Children to ‘Oranga Tamariki - Ministry for Children’. More>>


'Taming Globalised Capital': Why Is Labour Supporting Investment Rules In WTO?

‘Today, we learned the new government has added New Zealand’s name to a proposal designed to lead to foreign investment rules in the WTO at this week’s ministerial meeting in Argentina,’ said Auckland University Professor Jane Kelsey. More>>


Gordon Campbell: On The Politics Of Scaring Voters Back Into Line

Fear has always been a useful mobilising tool in politics… yet in 2017, bogeymen of all shapes and sizes seem to have fallen on hard times. For years, the National party had painted itself as being the only reliable defensive bastion against the terrifying prospect of a centre-left government… More>>


Gordon Campbell: On Drinking Water As A Failure Of Political Leadership

It is almost possible to feel sorry for the Health Ministry in their terrible, no good, very bad week... More>>





Featured InfoPages